TD Bank 2009 Annual Report Download - page 124

TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 FINANCIAL RESULTS120
5-Year Rate Reset Preferred Shares, Series AA
On September 12, 2008, the Bank issued 10 million non-cumulative
5-Year Rate Reset Preferred Shares, Series AA for gross cash consid-
eration of $250 million. Quarterly non-cumulative cash dividends,
if declared, will be paid at a per annum rate of 5.00% for the initial
period from and including September 12, 2008 to but excluding
January 31, 2014. Thereafter, the dividend rate will reset every five
plus 1.96%. Holders of the Series AA shares will have the right to
convert their shares into non-cumulative Floating Rate Preferred
Shares, Series AB, subject to certain conditions, on January 31, 2014,
and on January 31 every five years thereafter and vice versa. The Series
AA shares are redeemable by the Bank for cash, subject to regulatory
consent, at $25.00 per share on January 31, 2014 and on January 31
every five years thereafter. The Series AA shares qualify as Tier 1
capital of the Bank.
5-Year Rate Reset Preferred Shares, Series AC
On November 5, 2008, the Bank issued 8.8 million non-cumulative
5-Year Rate Reset Preferred Shares, Series AC for gross cash consider-
ation of $220 million. Quarterly non-cumulative cash dividends, if
declared, will be paid at a per annum rate of 5.60% for the initial
period from and including November 5, 2008 to but excluding
January 31, 2014. Thereafter, the dividend rate will reset every five
years to equal the then five year Government of Canada bond yield
plus 2.74%. Holders of the Series AC shares will have the right to
convert their shares into non-cumulative Floating Rate Preferred
Shares, Series AD, subject to certain conditions, on January 31, 2014,
and on January 31 every five years thereafter and vice versa. The Series
AC shares are redeemable by the Bank for cash, subject to regulatory
consent, at $25.00 per share on January 31, 2014 and on January 31
every five years thereafter. The Series AC shares qualify as Tier 1
capital of the Bank.
5-Year Rate Reset Preferred Shares, Series AE
On January 14, 2009, the Bank issued 12 million non-cumulative
5-Year Rate Reset Preferred Shares, Series AE for gross cash considera-
tion of $300 million. Quarterly non-cumulative cash dividends, if
declared, will be paid at a per annum rate of 6.25% for the initial
period from and including January 14, 2009 to but excluding April 30,
2014. Thereafter, the dividend rate will reset every five years to equal
the then five year Government of Canada bond yield plus 4.37%.
Holders of the Series AE shares will have the right to convert their
shares into non-cumulative Floating Rate Class A Preferred Shares,
Series AF, subject to certain conditions, on April 30, 2014, and on
April 30 every five years thereafter and vice versa. The Series AE shares
are redeemable by the Bank for cash, subject to regulatory consent,
at $25.00 per share on April 30, 2014 and on April 30 every five years
thereafter. The Series AE shares qualify as Tier 1 capital of the Bank.
5-Year Rate Reset Preferred Shares, Series AG
On January 30, 2009, the Bank issued 15 million non-cumulative
5-Year Rate Reset Preferred Shares, Series AG for gross cash considera-
tion of $375 million. Quarterly non-cumulative cash dividends, if
declared, will be paid at a per annum rate of 6.25% for the initial
period from and including January 30, 2009 to but excluding April 30,
2014. Thereafter, the dividend rate will reset every five years to equal
the then five year Government of Canada bond yield plus 4.38%.
Holders of the Series AG shares will have the right to convert their
shares into non-cumulative Floating Rate Class A Preferred Shares,
Series AH, subject to certain conditions, on April 30, 2014, and on
April 30 every five years thereafter and vice versa. The Series AG
shares are redeemable by the Bank for cash, subject to regulatory
consent, at $25.00 per share on April 30, 2014 and on April 30 every
five years thereafter. The Series AG shares qualify as Tier 1 capital of
the Bank.
5-Year Rate Reset Preferred Shares, Series AI
On March 6, 2009, the Bank issued 11 million non-cumulative 5-Year
Rate Reset Preferred Shares, Series AI for gross cash consideration of
$275 million. Quarterly non-cumulative cash dividends, if declared, will
be paid at a per annum rate of 6.25% for the initial period from and
including March 6, 2009 to but excluding July 31, 2014. Thereafter,
the dividend rate will reset every five years to equal the then five year
Government of Canada bond yield plus 4.15%. Holders of the Series
AI shares will have the right to convert their shares into non-cumula-
tive Floating Rate Class A Preferred Shares, Series AJ, subject to certain
conditions, on July 31, 2014, and on July 31 every five years thereafter
and vice versa. The Series AI shares are redeemable by the Bank for
cash, subject to regulatory consent, at $25.00 per share on July 31,
2014 and on July 31 every five years thereafter. The Series AI shares
qualify as Tier 1 capital of the Bank.
5-Year Rate Reset Preferred Shares, Series AK
On April 3, 2009, the Bank issued 14 million non-cumulative 5-Year
Rate Reset Preferred Shares, Series AK for gross cash consideration of
$350 million. Quarterly non-cumulative cash dividends, if declared, will
be paid at a per annum rate of 6.25% for the initial period from and
including April 3, 2009 to but excluding July 31, 2014. Thereafter, the
dividend rate will reset every five years to equal the then five year
Government of Canada bond yield plus 4.33%. Holders of the Series
AK shares will have the right to convert their shares into non-cumulative
Floating Rate Class A Preferred Shares, Series AL, subject to certain
conditions, on July 31, 2014, and on July 31 every five years thereafter
and vice versa. The Series AK shares are redeemable by the Bank for
cash, subject to regulatory consent, at $25.00 per share on July 31,
2014 and on July 31 every five years thereafter. The Series AK shares
qualify as Tier 1 capital of the Bank.
NORMAL COURSE ISSUER BID
The Bank did not have a normal course issue bid outstanding during
fiscal 2008 or 2009.
DIVIDEND REINVESTMENT PLAN
The Bank offers a dividend reinvestment plan for its common share-
holders. Participation in the plan is optional and under the terms of
the plan, cash dividends on common shares are used to purchase
additional common shares. At the option of the Bank, the common
shares may be issued from the Bank’s treasury at an average market
price based on the last five trading days before the date of the dividend
payment, with a discount of between 0% to 5% at the Bank’s discre-
tion, or from the open market at market price. During the year, a total
of 8.8 million common shares were issued from the Bank’s treasury
with a 1% discount. In 2008, 0.6 million common shares were issued
from the Bank’s treasury with no discount and 4.0 million common
shares were issued from the Bank’s treasury with a 1% discount under
the dividend reinvestment plan.
DIVIDEND RESTRICTIONS
The Bank is prohibited by the Bank Act from declaring dividends on
its preferred or common shares if there are reasonable grounds for
believing that the Bank is, or the payment would cause the Bank to
be, in contravention of the capital adequacy and liquidity regulations
of the Bank Act or directions of OSFI. The Bank does not anticipate
that this condition will restrict it from paying dividends in the normal
course of business.
The Bank is also restricted from paying dividends in the event that
either the Trust, Trust II, Trust III or Trust IV fails to pay semi-annual
distributions or interest in full to holders of their respective trust
securities, TD CaTS, TD CaTS II, TD CaTS III and TD CaTS IV Notes.
In addition, the ability to pay dividends on common shares without
the approval of the holders of the outstanding preferred shares
is restricted unless all dividends on the preferred shares have been
declared and paid or set apart for payment. Currently, these limitations
do not restrict the payment of dividends on common shares or
preferred shares.